Financial Authorities and 5 Major Financial Groups Continue Discussions on Extending COVID-19 Support

Discussion on Household Debt Management and Job Creation

Eun Sung-soo, Chairman of the Financial Services Commission, is attending a closed-door 'COVID-19 Financial Sector Issues Meeting' held on the 10th at the Korea Federation of Banks in Jung-gu, Seoul. Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Park Sun-mi] On the 10th, financial authorities and the five major financial holding companies held a private meeting to reaffirm their commitment to balancing support for overcoming the COVID-19 crisis and proactive risk management. Regarding the extension of COVID-19 financial support, which is scheduled to end at the end of September, they placed emphasis on "continued discussion."

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On the 10th, Eun Sung-soo, Chairman of the Financial Services Commission, held a private meeting with the chairmen of the five major financial holding companies at the Korea Federation of Banks at 8 a.m. to discuss financial sector issues related to COVID-19. Attendees included KB Financial Chairman Yoon Jong-kyu, Shinhan Financial Chairman Cho Yong-byeong, Woori Financial Chairman Sohn Tae-seung, NH Nonghyup Financial Chairman Sohn Byung-hwan, and Hana Financial Vice Chairman Ham Young-joo.

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Over the past year, the entire financial sector has provided financial support amounting to a total of 204 trillion won (as of the end of June) through loan maturity extensions and repayment deferrals for small and medium-sized enterprises and small business owners. Amid growing calls to further extend the financial support measures set to expire in September due to the fourth wave of COVID-19, Chairman Eun told the financial holding company leaders, "We are carefully reviewing the positive effects of the current maturity extension and repayment deferral support measures, as well as the negative effects that could accumulate if these measures are prolonged," adding, "We will fully gather opinions from the financial sector during this process."

The chairmen of the financial holding companies emphasized their continued commitment to supporting the real economy sector, stating, "Since the impact of real sector insolvency spreading to the financial sector would have significant repercussions on our economy, we are thoroughly preparing by setting aside reserves and conducting regular borrower monitoring."

Discussions were also held on strengthening household debt management. Chairman Eun mentioned that while the expansion of private debt was inevitable during the process of overcoming COVID-19, the rapid increase requires that risk factors be given significant consideration from now on.

The financial authorities announced plans to establish a more detailed supervisory network to manage the household debt growth rate at an appropriate level and requested proactive management to ensure that household debt does not become a latent risk to the future of our economy and financial companies. In response, the financial holding company chairmen stated that they will meticulously check for household loans unrelated to actual demand or those that may fuel asset bubbles, and support stable management within the financial authorities’ household debt growth target (5-6% within this year).

There was also discussion on creating quality jobs in the financial sector.

Chairman Eun urged the financial sector to actively focus on and cooperate in providing "quality financial jobs" that young people want to work in, especially requesting support for the upcoming "2021 Financial Sector Joint Recruitment Fair" to be held next month. The financial holding company chairmen agreed on the social role of the financial sector in creating youth employment and expressed their intention to actively discover new jobs suited to the changing financial environment, such as AI developers and fintech specialists, as well as to promote job creation in the real economy through financial support for new growth and innovation sectors, startups, and venture businesses.

This content was produced with the assistance of AI translation services.